The opioid crisis which was largely created by large pharma companies to begin with, has now wound itself from distributors like Rochester Drug Cooperative to small pharma companies like Purdue Pharma to finally hit the big guns – Johnson & Johnson, Teva Pharma and the like. All these large pharma companies are under assault with tons of lawsuits while hedge funds have jumped on taking massive short positions driving down the stocks of these companies and entire health care group along with it.

It is no secret that everyone of these companies benefited and posted record sales and profits on sales of OxyContin and Fentanyl, even as hundreds and thousands of kids and adults got addicted to these drugs. It all began as a simple pain medication for surgery or injury that was too hard to treat with Vicodin or other pain medications. But, very quickly, it spiraled out of control as doctors and pharmacists began doling out prescriptions for these addictive drugs under the premise of helping consumers but inadvertently or otherwise, created a micro-industry that thrived on insurance and medicare paying out thousands of dollars for medication that forced the patients to keep coming for more. The side effects of this addiction have been all over the newspapers and the press, and some of the stories are heartbreaking.

But through it all, none of these companies blinked once. In fact, in its most recent investor call – CEO of drugmaker Mallinckrodt Plc, the largest generic producer of Oxycodone, said he expects to bear no liability for the opioid crisis despite the fact that 400,000 Americans had died from opioid overdose from 1999 to 2017.

Future Wealth’s View

There is something insidious and fundamentally unethical about creating and profiting from drugs that kills and destroys people. Tobacco, alcohol, firearms and cannabis industries are examples of companies that simply have succeeded from deception, collusion and swindling, and have blurred the lines between acceptable and unacceptable behavior from companies.

And the companies in these industries are not alone. Wells Fargo with millions of fake accounts, Volkswagen duping emission standards, Sears swindling its shareholders and the list goes on. For the average investor who leads a clean life – working a  9 to 5 job, taking his kids to school, going to ball games and religiously attending church on sundays, seeing these companies behave the way they do, goes against their every principle and value system.

But yet, when it comes to investing their savings, despite their pre-conceived notions of the company, the very same consumers end up putting money in the dubious companies to get maximum return. The move toward ethical investing has not gotten mainstream attention and will likely not happen for awhile. Money does strange things to people’s ethical bent and unfortunately, the best returns are often to be had in dubious circumstances.

A stark reminder of ill effects of tobacco was the ad of the famous Malboro Man still riding horse saying to his friend “Bob, I miss my lung”. But Philip Morris, the manufacturer of Malboro, was a staple in the Dow Jones Industrial Average from 1985-2008, and despite being knocked of the index, is still a core holding in many mutual funds that seek its 5% dividend yield.

Big pharma companies are no different – Opioid crisis or not, they will remain in everyone’s portfolio.